SAC Capital Advisors, run by hedge fund titan Steven A. Cohen, has lost seven staff in Hong Kong and relocated five others there to New York and London, according to regulatory filings and people familiar with the matter.
The departures come at a challenging time for the firm, with investors in February submitting redemption notices to pull around $1.7 billion from the $15 billion fund following a U.S. insider trading probe. Cohen has not been accused of wrongdoing, but the investigation led to the arrest of veteran portfolio manager Michael Steinberg in March, one of Cohen's closest confidantes.
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The departures also underscore the broader theme of a struggling hedge fund industry in Asia, where investment returns have missed expectations. SAC says it still aims to build its business in the region.
"We see the Asia and Japan market as a dynamic opportunity to grow our business," SAC Chief Operating Officer Sol Kumin said in a response sent through a spokesman, when asked about the Hong Kong departures.
There is more capital in Asia now than ever before, the spokesman cited Kumin as saying.
SAC has added three people to its team in Hong Kong this year and is setting up an office in Japan, said a person familiar with the matter.
The hedge fund expects to hire more in both locations this year, the person said.
LEAVING SAC CAPITAL
Those leaving SAC in Hong Kong include Aaron Nieman, who had been at the firm since 2009 after SAC hired him back from the Blackstone Group , and Frank Ho, who earlier worked at hedge fund Highbridge Capital, sources said.
Jinchul Lee, William Montgomery, Steven Su, Miaodan Wu and Xiaojing Zhang also left the hedge fund this year, according to sources and records with the Hong Kong market regulator.
Jay Luo, SAC's head in Asia, left the firm last year in one of the most high-profile departures for some years in the regional hedge fund industry.
SAC has also relocated five members of its Hong Kong quantitative trading team this year, according to a source familiar with the matter.
Faycal Abbes has moved to London, while Flavien Delverdier, Gilles Morihain, Alborz Rafie Elizei and Charlie Rondeau have been shifted to New York, the source said, declining to be identified as he was not authorized to speak on the matter.
The SAC spokesman declined to say why these people were shifted from Hong Kong.
The number of securities trading licenses issued by the Hong Kong market regulator to SAC has increased every year since the firm opened its office in the city in 2006. As of the end of 2012, the regulator had issued 53 licenses to SAC.
That has dropped to 44 as of now, according to data compiled by webb-site.com.
Hedge funds in Asia have struggled to draw investors since the financial crisis in 2008, with the regional industry managing $130 billion, nearly $50 billion below the peak, data from Eurekahedge shows.
(Reporting by Nishant Kumar; Editing by Michael Flaherty and Ryan Woo)